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92 Am. Bankr. L.J. 111 (2018)
So You Want to Buy a Discharge: Revisiting the Sticky Wicket of Settling Denial of Discharge Proceedings in the Chapter 7 Bankruptcy

handle is hein.journals/ambank92 and id is 119 raw text is: 



     So You Want to Buy a Discharge?

       Revisiting the Sticky Wicket of

           Settling Denial of Discharge

           Proceedings in the Chapter 7

                          Bankruptcy

                                    by

                        Andrew F. Emerson, Esq.*

ABSTRACT

    The propriety and requisites for the settlement of denial of discharge pro-
ceedings, initiated under § 727 of the Bankruptcy Code, has long been a subject
of controversy in the federal judiciary. One series of decisions prohibits any
settlement that would include the debtor's payment of settlement funds or giving
of other value. At the other end of the spectrum, various courts have approved
such settlements, even permitting a direct payment to the prosecuting creditor
under appropriate circumstances. This article examines various judicial posi-
tions on such proposed settlements. This article concludes that approval or
denial of these proposed settlements is best resolved by bankruptcy judges, on a
case-by-case basis, unfettered by strict per se prohibitions that have developed in
the case law.

INTRODUCTION

    The raison d'tre of the chapter 7 bankruptcy is securing the debtor's
discharge.' Nevertheless, it is an oft-repeated judicial tenet that a condition
precedent to the granting of a chapter 7 discharge is candor by the debtor in
his dealings with the trustee and creditors, and a corresponding full financial

   *©2017
Mr. Emerson graduated with honors from the University of Georgia School of Law where he was also a
member of the Georgia Law Review. He practiced law in the area of creditor's rights for over twenty-five
years, frequently representing financial institutions, corporations, and individuals in chapter 7 and 11 bank-
ruptcy proceedings. Presently, Mr. Emerson is a Lecturer in Law at Central Michigan University.
   iSee Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367 (2007) (quoting Grogan v. Garner, 498
U.S. 279, 286-97 (1991)) (observing that the principal purpose of the Bankruptcy Code is to grant a fresh
start to the honest but unfortunate debtor).

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